Documents & Reports

PPIAF assistance in East Asia and the Pacific (English)

Abstract

The regulatory framework in many Asian developing countries has been reformed to promote private sector investments in power generation. Asian developing countries that have decided to restructure the power sector include the People's Republic of China... See More +The regulatory framework in many Asian developing countries has been reformed to promote private sector investments in power generation. Asian developing countries that have decided to restructure the power sector include the People's Republic of China; India; Indonesia; Republic of South Korea; Malaysia; Pakistan; Philippines; Singapore; Taipei, China; and Thailand. In early 2002, Public-Private Infrastructure Advisory Facility (PPIAF) funded a study designed to develop a framework for financing merchant power plants in developing countries. The study defined a merchant power plant as a power plant owned or controlled by the private sector that is free to negotiate the basis for selling its output to willing buyers. Likewise, the debt servicing is not directly or indirectly guaranteed by any government or non-commercial arrangement. The activity established a broad understanding of the merchant power plant model. For power sector restructuring to be successful and for competitive electricity markets to be efficient, a proper understanding of the merchant power plant model is necessary among policymakers, regulators, and lenders.
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